Question: Given the following data for a stock: beta = 1.2; risk-free rate = 3%; market rate of return = 13%; and expected rate of return

Given the following data for a stock: beta = 1.2; risk-free rate = 3%; market rate of return = 13%; and expected rate of return on the stock = 12%. Then the stock is:

a) overpriced
b)		correctly priced
c)		under priced
d)		cannot be determined

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